Two Catalysts for Hitting S&P 1,500: Jim Paulsen

Two things could send the S&P toward a level of 1,500, Jim Paulsen of Wells Capital Management told CNBC on Tuesday.

“I look at two big catalysts here going into next year. One of them is, we’ve got to get the emerging-world economic recovery going again. And secondly, we need to develop an attitude in this country that the U.S. recovery is not just on life support from the Fed but is a sustainable, inherently growing animal,” he said on “Fast Money.” “I think we might accomplish both of those.”

Paulsen said China’s monetary policy, as well as its rising supply of real money, could spur an economic upswing, which could boost the U.S. manufacturing sector and lessen the impact of European troubles.

(Read More: ‘I Think You Buy This Jobs Report’: Brian Kelly)

But he added that the U.S. economy was already on an upturn.

“Here, I already think we’re seeing the elements of sustainability,” he said. “We’re seeing an unemployment rate coming down, even though the labor force is growing. We’re seeing confidence at a 4-year high. We’re seeing housing activity rising for the first time. We’re seeing home prices rising. We’re seeing bank lending rising for the first time. We’re seeing auto sales back to a 15 million annual rate.

(Read More: S&P 1,565 in U.S. ‘Coiled Spring’ Economy: Yardeni)

“All while people are worrying about how weak things are, we’re growing about 2.3 percent in the last year. If we up that a little toward 3 percent by getting back manufacturing, I think that you could see a lot of upward tilt to the market, even if earnings only grow maybe 5 percent over the next 12 months.”

Trader disclosure: On Oct. 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Michael Murphy is long AAPL; Michael Murphy is long WFC; Michael Murphy is long TGT; Murphy is long TRN; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SBUX; Joe Terranova is long NFLX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long VLO; Joe Terranova is long CCSTR; Joe Terranova is long CHKP; Joe Terranova is long GLW; Joe Terranova is long EMC; Joe Terranova is long NXPI; Gemma Godfrey is funds long AAPL; Gemma Godfrey is funds long JPM; Gemma Godfrey is funds long MSFT; Gemma Godfrey is funds long AMZN; Gemma Godfrey is funds long GOOG.

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